Slide 1 18 October 2015 Group of Experts on the Impact of Globalization on National Accounts Art Ridgeway, Statistics Canada Tihomira Dimova, UNECE 3 February 2011

Slide 2 18 October 2015 Group of Experts on the Impact of Globalization on NA  Established in April 2007, following a decision of the Conference of European Statisticians (CES)  Objective: review the main distortions in the compilation of NA and related source statistics, caused by globalisation and put forward proposals on how to deal with these distortions  Membership: All member states of UNECE, OECD and Eurostat Leadership group: Canada, Czech Republic, Finland, the Netherlands, UK, USA, Eurostat, IMF, OECD and UNECE Chair: Peter van de Ven, Statistics Netherlands Vice-Chair: Art Ridgeway, Statistics Canada Editor: Peter Bull, UK

Slide 3 18 October 2015 Group of Experts on the Impact of Globalization on NA  Outcome: Practical Guide with recommendations and best practices in relation to the main globalization factors that affect NA  Timetable: January 2011: the draft Guide was submitted for comments to the CES Bureau March/April 2011: Electronic consultation with all CES member countries and organizations June 2011: Presentation of the Guide to the CES plenary session for endorsement.

Slide 4 18 October 2015 Globalization factors and NA measures Global phenomenonNational accounts items most affected Arrangements within MNEs, including transfer pricing Allocation of GVA/GDP across countries; international trade in goods and services; investment income and financial flows FDI relationshipsInvestment income and financial flows; i.i.p. Special purpose entities (SPEs) International trade in services; investment income and financial flows; i.i.p. Goods sent abroad for processing GVA/GDP; international trade in goods and services MerchantingInternational trade in goods (and possibly services)

Slide 5 18 October 2015 Globalization factors and NA measures (cont.) Global phenomenonNational accounts items most affected International trade in intellectual property assets GVA/GDP; capital formation; international trade in assets and related services Quasi-transit tradeGVA/GDP; international trade in goods International labour movement and remittances GNI, gross national disposable income, international transfers Ownership of property abroad International trade in services; investment income and financial flows; i.i.p. Internet tradingInternational trade in goods and services; household consumption

Slide 6 18 October 2015 Content of the Globalization Guide  12 core chapters split into three main groups: Multinational enterprises Trade in goods and services, and global manufacturing Household-related issues  Specific country experiences are presented as annexes to the chapters  Addendum on the impact of the financial crisis  The way ahead: research agenda and international fora that can advance the work

Slide 7 18 October 2015 Main conclusions and suggestions for future work – Global manufacturing  Conceptual and measurements issues Criteria to apply the “merchanting” or “goods for processing” treatment Valuation of the good or the service - arms length vs. within MNEs Inventories held abroad

Slide 8 18 October 2015 Main conclusions and suggestions for future work – Goods for processing  Conceptual and classification issues to clarify  double counting as goods and services?  coding to allow recording on ownership basis  Analytical aspects

Slide 9 18 October 2015 Main conclusions and suggestions for future work – Merchanting  Merchanting of goods Linking in with other measures of trade and production  Merchanting of services in an internet world Not covered in international manuals 18 October 2015

Slide October 2015 Main conclusions and suggestions for future work – Intellectual Property  Major challenge for trade measurement Services associated with intellectual property Ownership changes for existing intellectual property Income flows associated with rights to use  Particularly challenging within MNEs 18 October 2015

Slide October 2015 Main conclusions and suggestions for future work – Administrative data  Administrative data as second best Assumptions needed to fill in the gaps Evolution of global production challenges assumptions  Budget realities Constrained resources for statistics Pressure to limiting response burden Costly to adjust administrative systems

Slide October 2015 Final thoughts  Requirement to use data from multiple sources to address many issues  How to facilitate integration of administrative data sources like merchandise trade with other administrative sources and surveys  No country or institution will do it alone 18 October 2015